Julian Metcalfe: We're ahead of US in fast food, says Pret A Manger boss | Daily Mail Online comments For a man who wants to launch his new restaurant chain in the US and was once in partnership with fast-food giant McDonald’s, Pret A Manger founder Julian Metcalfe is not afraid to tell Americans some hard truths about their eating habits. With one high-street food revolution under his belt, plus his healthy food-making firm Metcalfe’s Food Company, Metcalfe is getting stuck into expanding another project. Itsu, his Far East-inspired food chain which was launched in 1997 and opened its 50th store in Richmond, Surrey, last month, is a ‘baby’, he says. But he has great ambitions for it. Light bites: Julian Metcalfe with his healthy snacks including 'skinny' popcorn made by Metcalfe's Food Company It may be small by comparison with Pret A Manger, which has more than 60 of its 335 shops in the US, but already he has his sights on America for Itsu, which he sees as an alternative to more unhealthy fast food. ‘Somebody has to give the American fast-food giants a run for their money.

Wouldn’t it be great to see lots of Americans eating healthy food before they all die? That’s why Pret’s doing so well in America. Coca-Cola bottler is latest to suffer effect of Ukraine crisis We have more than 60 stores in the US because people are bored with eating fried food,’ he says. ‘It says a lot about Britain that in many areas – in music, food, theatre and cinema – we are so brilliant, so ahead. We eat far better than they do in America.’ It’s a view that is rather at odds with his past actions, of course. Metcalfe and his co-founder at Pret, Sinclair Beecham, famously sold a third stake in Pret to McDonald’s in 2001 for £50million, enduring a torrent of bad publicity from those customers and critics who thought he had ‘sold out’ to the ‘enemy’. In 2008 the involvement of McDonald’s ended when Pret was sold to private equity firm Bridgepoint, while the management, including Metcalfe and Beecham, retained a 33 per cent stake. His comments about American fast-food chains suggest the relationship he once had with McDonald’s is well and truly over.

French-Anglo Saxon: Pret A Manger sandwich chain was set up by Metcalfe and Sinclair Beecham in 1986 ‘You go to McDonald’s and you can pay £5.50 for a meal,’ he said, but he wants to ‘educate’ people that ‘healthy options don’t have to cost the earth’. Metcalfe fantasises about having Itsus at motorway service stations. ‘That’s my dream: one day to be driving down the M4 and see an Itsu. Starbucks, Greggs, Itsu – screech – in I go,’ says the 54-year-old Old Harrovian. Itsu last hit the headlines in 2006 when the former KGB agent Alexander Litvinenko ate at the chain’s Piccadilly restaurant before finding he had been poisoned by radioactive polonium-210. Litvinenko died three weeks later. Traces of the poison were found in the restaurant and Metcalfe was ordered to close it, though subsequent tests showed that it was not the source.

Metcalfe is enjoying sampling his own snacks – which feature a calorie count on the packaging ‘because it reminds people’ – and jokes that without his team he would just be travelling around finding good food. He says: ‘When Pret started there was nothing else. So with Pret it was about preservative-free food. It was about how can we make food every day and get rid of it every night. It was like, “Oh my God, now I’ve created a rod for my back”. Healthier choice: Julian Metcalfe sees Itsu's food as an alternative to more unhealthy fast food in the US ‘Itsu’s taken the whole thing to a new level. The food of Asia is amazing, it’s wonderful. Pret A Manger is more French-Anglo Saxon. ‘The thing about the Anglo Saxon menu is that at breakfast we love the steamed milk, we love croissant, we love bread. We [Itsu] don’t even open at breakfast. It opens at 11. But at night you can come into Itsu and have a beer and a potsu of chicken and brown rice or noodles.

Some of our stores are very busy in the evening.’ He adds: ‘The secret is to not do too much. That’s the strength of Pret, which is having its best year in its history. There comes a point where if you over-tinker with it you just break it. Pret is standing on its own two feet. It is like an adolescent, whereas Itsu is like a baby. It’s a toddler. But from toddlers things happen. You’re not a toddler forever.’ Another challenge is business rates. He says: ‘The giants who sell us fast food globally are very successful and they tend to do what they do very well. It’s mainly fried food and it’s processed, it’s not particularly nutritious. But the reason there’s no competition for them is what they do is much harder than it looks. From mochas to miso soup, a tasty guide to the Metcalfe food empire PRET A MANGER Pret A Manger sandwich chain was set up by Metcalfe and Sinclair Beecham in 1986.There are about 335 Pret shops worldwide. Most are in the UK and Pret turns over about £450 million a year.

In 2001, the McDonald’s Corporation bought a 33 per cent stake. In 2008, Pret A Manger was sold to Bridgepoint. Pret A Manger management retains 33 per cent of the company. Metcalfe and Beecham have a ‘small’ stake. ITSU Itsu, which means ‘when’ in Japanese, began life as a restaurant in Chelsea, London, in 1997. It was inspired by Metcalfe’s travels in Japan, where he says you can ‘eat like a king for £3’. He says of the chain: ‘It’s small, 50 stores. But there will come a time when we have 500.’ The busiest shop is in Oxford.New shops opening include Brighton and Leeds. Itsu-branded products are stocked by retailers including Tesco, Sainsbury’s and Waitrose. Itsu turned over £60 million and made £6 million profit in the past year. METCALFE'S FOOD COMPANY Metcalfe’s Food Company makes food and drink under the Itsu and Metcalfe’s Skinny brands for Itsu, Pret A Manger and other retailers. It was started in 2009.

Turnover has increased from £0.3million in 2011 to £9.2 million this year. Products include Itsu-branded miso soups and rice cakes. Sales of Itsu crispy seaweed thins are up 95 per cent year on year in Waitrose. ‘If any of us opened a business where the rent and rates were half-a-million a year, which is, let’s say, a shop in Oxford – that’s £10,000 a week before you open, before you pay your staff or get your tomatoes in the morning or turn on the lights. ‘Business rates are really high. They’re killing retailing. In some cases business rates are much higher than rent, so that’s why we complain about going to the cities and half the shops are empty. Imagine what it’s like for the landlords. But who feels sorry for a landlord or a shopkeeper? No one.’ He says he splits his time between the businesses so that it’s ‘mainly Itsu, then some Metcalfe’s and some Pret. Itsu is 24 hours, seven days. I think about it all the time. At weekends I never stop. I love it.

I make vegetable fruit drinks with the kids. We try them again and again until we say, “That’s it, it needs avocado for the texture”.’ Cooking is a passion for the Itsu boss, who lives in South Kensington, in London. Metcalfe, whose mother killed herself at Christmas when he was just seven, has a large family. He is married to Brooke de Ocampo and has three children and four stepchildren. Last year it was revealed that eight in ten Pret A Manger workers were foreign born, and Metcalfe supports Jamie Oliver’s recent claim that all his restaurants would close if it weren’t for European immigrants. Metcalfe has said that out of every 100 applications, only three are English in London. He is inspired by his staff. He says: ‘People who think they don’t know much but they know everything. That’s how you build a great company. You listen to people.’ Metcalfe meets Itsu managers on a boat on the Thames four times a year to share ideas, and employees receive silver Tiffany butterflies if a customer writes in with positive feedback. He says: ‘We do it because we love it and we’re proud of it. I hope that lasts for ever. It may not.

But I hope it does. It can last for a few generations. ‘There will come a time when we have enough shops. And that might be sooner than you think.’ Pret A Manger Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies Pret A Manger Harvard Case Solution & Analysis Pret A Manger Case Solution Introduction Pret A Manger has been a ready to eat chain of coffee shops that has been selling a range of up market, healthy sandwiches and different desserts along with a variety of coffees to an increasingly discerning set of lunchtime customers. The company started off in 1986 by two college friends, Sinclair Beecham and Julian Metcalfe, who were unable to find a reasonable sandwich anywhere in the city, therefore they launched their own brand. The two college friends borrowed 17,000 pound from a local bank and bought the rights for the name “Pret A Manger” from a dormant company. The two friends opened the first store on Victoria Street where they launched the services with the vision of being simple, delicious, friendly and motivated. In 2003, Schlee was made the CEO in 2003.

The major offerings by the fast food chain were its sandwiches, whereas the chain also offered salads, pastries, soups and coffee. The major commitment and the unique selling proposition of the company has been its use of natural flavors, colors and no preservatives. The major raw material for manufacturing Pret products are mostly sourced from the United Kingdom. The major success factor for the fast food chain has been the fact that the business revolves around the fact that it offers kitchen in every shop which actually ensures the freshness and success of its products. Along with this, another attribute of the fast food chain has been the fact that it has the strategy of empowering the employees. Pret has been focused on hiring individuals with the consent of the store managers, employees. This has again been a factor that has made the company a successful entity. The element of bonus, performance appraisal has also been a significant success factor and employees feel valued working for the food chain because they know they shall be treated with decent monetary reward it they fulfill the expectations of the management. Pret A Manger has been a successful induction in the United Kingdom food industry because it has maintained high standards of the quality it delivers to the customers.

Moreover, the management has been quite supportive in dealing with the customers which attract more revenues and more returning customers for Pret A Manger. Problem Statement The major problem that has been identified in the case “Pret A Manger” has been the fact that Pret A Manger, which is a London based fast food chain of sandwich shop, has been always known for its fast, genuine service and also the face that it has been preparing all its sandwiches on site daily. Since it has been taken over by the new management; the board has made a plan to grow at 15 per cent each year. In order to actually implement the plan of the board, the CEO has considered opening “twin” shops in different locations where it is difficult to have a kitchen. The idea behind this move is to make Pret physically present at all places, whereas the sandwiches should be delivered through a parent shop nearby. As the focus of the chain has been to prepare all its sandwiches in-house; therefore, the idea of having separate shops is seen as an issue for the chain because the unique proposition of Pret has been “Just Made in this Shop’s Kitchen”. With twin shops, the chain has to change its culture.

The question over here is whether Pret employee and customers should accept the concept of twin shops or actually view it as counter to the Pret culture shops or view them as counter to the Pret culture? Analysis Pret a Manger founder slams top rate of tax Published: 02 Mar 2012 Last Updated: 06 Nov 2012 'Taxing people who work very hard more and more is a hideous mistake. It's incredibly naïve and it's weak. The people who need to build businesses and somehow find the confidence to create jobs are not the same people you need to penalise', he told MT. The 50p tax rate was introduced in April 2010, and was directed at those earning more than £150,000. But it was always meant to be a short-term measure and, as the budget is announced later this month, pressure is growing against George Osborne to drop the tax which has upset entrepreneurs the most. 'This is not like taxing cigarettes. Cigarettes are bad for you. Employing people is not bad', Metcalfe says.

Julian Metcalfe founded sandwich chain Pret a Manger in 1986 with Sinclair Beecham after taking out a £17,500 loan. The pair sold most of the company to a private equity firm and Goldman Sachs in 2008 for an undisclosed sum. Profits at the posh sandwich chain were £46.1m last year - a 37% increase on the year before. In recent years, Metcalfe has focused more on his other business - sushi chain Itsu, which he started in 1997. Itsu's latest results show a turnover of £26m and profits of £640,000. Whilst still a fraction of what Pret is making, Metcalfe has big plans for Itsu. His next step is to branch out into serving evening meals. Within the next two months, five Itsu outlets will stay open later in to take advantage of people looking for a cheap dinner in the capital. 'There's almost nowhere you can eat in London for less than £10, unless it's fast food,' he says.

Itsu, which has around 40 shops in London and sells sushi, soup and rice dishes, is currently a favourite for city workers looking for a quick lunch. Currently the stores close at around 7pm but Metcalfe wants to extend the closing time to 10pm. He's hoping the chain will appeal to those who want an affordable but healthy meal out. 'Many of the dishes will be under £5. The cheapest is £3.29. We've got a whole new menu', he says. Of course, the challenge will be turning it into a profitable business. With rents averaging £4,000 a week for a shop in London and overheads high, that probably explains why restaurants have found it difficult to dish up cheap dinners. But Metcalfe's focusing on the long term: 'Of course it's achievable, it just hasn't been done before. And yes it will be profitable - just. It took years for Pret to make a decent profit.

Now its making millions.' - Julian Metcalfe will be interviewed in April's edition of Management Today Tags: Pret a Manger founder slams top rate of tax Published: 02 Mar 2012 Last Updated: 06 Nov 2012 'Taxing people who work very hard more and more is a hideous mistake. It's incredibly naïve and it's weak. The people who need to build businesses and somehow find the confidence to create jobs are not the same people you need to penalise', he told MT. The 50p tax rate was introduced in April 2010, and was directed at those earning more than £150,000. But it was always meant to be a short-term measure and, as the budget is announced later this month, pressure is growing against George Osborne to drop the tax which has upset entrepreneurs the most. 'This is not like taxing cigarettes. Cigarettes are bad for you. Employing people is not bad', Metcalfe says. Julian Metcalfe founded sandwich chain Pret a Manger in 1986 with Sinclair Beecham after taking out a £17,500 loan.

The pair sold most of the company to a private equity firm and Goldman Sachs in 2008 for an undisclosed sum. Profits at the posh sandwich chain were £46.1m last year - a 37% increase on the year before. In recent years, Metcalfe has focused more on his other business - sushi chain Itsu, which he started in 1997. Itsu's latest results show a turnover of £26m and profits of £640,000. Whilst still a fraction of what Pret is making, Metcalfe has big plans for Itsu. His next step is to branch out into serving evening meals. Within the next two months, five Itsu outlets will stay open later in to take advantage of people looking for a cheap dinner in the capital. 'There's almost nowhere you can eat in London for less than £10, unless it's fast food,' he says. Itsu, which has around 40 shops in London and sells sushi, soup and rice dishes, is currently a favourite for city workers looking for a quick lunch. Currently the stores close at around 7pm but Metcalfe wants to extend the closing time to 10pm.

He's hoping the chain will appeal to those who want an affordable but healthy meal out. 'Many of the dishes will be under £5. The cheapest is £3.29. We've got a whole new menu', he says. Of course, the challenge will be turning it into a profitable business. With rents averaging £4,000 a week for a shop in London and overheads high, that probably explains why restaurants have found it difficult to dish up cheap dinners. But Metcalfe's focusing on the long term: 'Of course it's achievable, it just hasn't been done before. And yes it will be profitable - just. It took years for Pret to make a decent profit. Now its making millions.' - Julian Metcalfe will be interviewed in April's edition of Management Today Tags: Hold the Mayo! Itsu Healthy Fast-Food Chain Eyes New York City - Bloomberg Hold the Mayo! Itsu Healthy Fast-Food Chain Eyes New York City Richard Vines Julian Metcalfe can’t stop himself. The founder of Itsu and Pret a Manger starts checking the boxes of salad and sushi as soon as he enters a branch of Itsu on London’s Finsbury Square to be photographed.

At least, that’s after greeting the staff and kissing the manager. Why is that sign there? What is this box here? He’s a details man. It’s hard to get him to stand still to pose for a picture. And when he finally does, his eyes are darting round the store, taking in every aspect of what’s going on. The shelves are filled with light Asian meals, from salmon and tuna tartare (160 calories) to coconut chicken wrap (140 calories). Hot options include silken tofu and shaved green leek soup; and Thai duck with rice and vegetables. “It’s very difficult to find the harmony in my business, in the Itsu style of business,” he says in an interview. “You got to have the menu, the care and pride of the staff and the operations in sync. And when they are, it’s like music.” Metcalfe, 55, founded Pret a Manger in 1986 with his friend Sinclair Beecham, with whom he was a student at the Polytechnic of Central London. Bridgepoint acquired a majority stake in the sandwich chain in 2008.

Itsu -- which means “when” in Japanese -- started as a restaurant in London’s Chelsea in 1997. Thirty More Stores It has grown into a chain of U.K. stores selling healthy Asian food. The 50th has opened and 30 more are on the way. Privately owned Itsu last year posted earnings before interest, taxes and amortization of 6 million pounds ($10 million) on sales of about 60 million pounds. A separate company, Metcalfe’s Food Co., groups two brands, Itsu Grocery and Metcalfe’s Skinny. Itsu Grocery takes the brand into supermarkets and delicatessens; Metcalfe’s Skinny provides healthier alternatives to snacks such as crisps and cookies. Itsu plans to enter New York City and California, possibly starting as early as 2016. The company previously opened a store at the World Financial Center in Manhattan in December 2006. That was a joint venture that soured within weeks, according to Metcalfe. “I chose the wrong partner,” Metcalfe says, rejecting the idea that New York is a tough market. He cites the success of Pret a Manger, which has 60 U.S.

stores, in the cities of New York, Boston, Chicago and Washington. (There are 280 in the U.K., 14 in Hong Kong and 10 in France.) “Itsu is very different (from Pret) because it has more hot food,” he says. “It’s freshly made, which is very important, particularly in New York, where the weather can get chilly. It’s also more expensive. It’s 2 pounds more but for that 2 pounds I’ll give you some really, really yummy stuff. I will also serve you within 60 seconds. That’s the plan.” No Franchise Itsu currently draws more than 1 million customers every month. Metcalfe says it costs about 550,000 pounds to open each store and the company’s expansion is financed by HSBC Holdings Plc. He says Itsu has recently secured an additional 9 million pounds financing on top of a 10 million-pound package in 2013. A successful store is one with more than 1 million pounds a year in sales, with customers spending an average of 6.19 pounds a visit. Like-for-like sales growth is 14 percent.

Metcalfe says he is talking to a potential partner in France but he won’t consider turning Itsu into a franchise operation. “Something as complex and as fragile at Itsu can’t work that well with people who are primarily driven by ensuring a good income stream,” he says. “It’s too fragile. We have to harness the passion and the pride of the management and the employees. Franchising tends to be a bit more about control and money and less about the product and the passion.” Less Sushi Metcalfe is more interested in talking about the food than the numbers at Itsu. “It’s got huge potential because the people of this country are desperately trying to find flavorsome, yummy, delicious food. And it’s extremely difficult to do it at 6.19 pounds a head, I tell you, and do it quickly and efficiently. ‘‘Over the past two years, Itsu’s gone from 70 percent, 80 percent sushi right down to -- on a rainy day -- only 30 percent. We’ve created 26 salad dishes, hot brown-rice dishes. The latest dish is a hot vegetable soup with noodles with a poached egg where the yolk is runny.

Three chicken-noodle soups…” I’m urged to dip my finger into a pot of herb dressing, which is delicious. When I try to throw it away, Metcalfe says he’s taking it home. He’s tweaked the recipe and he wants to try it. As I leave, he resumes studying the cooler cabinets. “We’ve got 50 stores now,” he says. “We could have 500.” (Richard Vines is the chief food critic for Bloomberg. Opinions expressed are his own. Follow him on Twitter @richardvines ) Before it's here, it's on the Bloomberg Terminal. Pret A Manger chief is stacking up healthy profits in lean times | Business | The Guardian The Friday interview Pret A Manger chief is stacking up healthy profits in lean times Pret's Clive Schlee helped turn around the sandwich chain after it expanded too fast, and saw it survive the recession as a trusted brand Clive Schlee says Pret A Manger's most important market is office workers, with shoppers and students also making up a large proportion of customers.

Photograph: Frank Baron for the Guardian Share on Messenger Close When word got out that Pret A Manger was going to move Ibrahim – a popular barista at its Central London branch near Hanover Square – to another shop, there was uproar. Pret's chief executive, Clive Schlee, was bombarded with letters from senior staff at law firms and estate agents based nearby, begging for Ibrahim to stay. That is not unusual, Schlee insists, as in the fast-food dynamic of Pret's distinctive high-street sandwich and coffee business, customers not only expect speedy and friendly service but the loyal regulars build up relationships with the staff. "Pret really has worked hard to make our staff care about what they are doing," he says. "That is very clearly understood and appreciated by customers and is, I believe, Pret's ultimate competitive advantage." Schlee is sitting in his open-plan office at the company's headquarters in Victoria just a stone's throw from where the first Pret shop opened in 1986, revolutionising fast food in Britain.

College friends Julian Metcalfe and Sinclair Beecham, with no business experience, had spotted a gap in the market for what they considered "proper" sandwiches without the additives and preservatives in so much fast food. Expansion In 2001, Pret controversially sold a 33% stake to burger chain McDonald's for £50m, funding rapid expansion overseas. But after a spectacular start, the company disastrously lost its way. After two years of losses, Metcalfe returned as creative director in 2003 and brought in Schlee, who had worked a 17-year stint in Hong Kong at multinational Jardine Matheson, much of it in charge of the group's fast-food brands such as Pizza Hut, Sizzler and Taco Bell restaurants. Schlee recalls: "I left Hong Kong on the same day as [former Hong Kong governor] Chris Patten in 1997. I didn't have a job to go to and I looked around for ways of using my capital and abilities and I felt much more comfortable with the retail business.

Then I met Julian Metcalfe and became his partner in Itsu, before we both moved to Pret – him for the second time." Schlee set about ensuring the chain was "sound at home" and the ill-fated international expansion – when it "extended too fast and too far" – was pruned back: "We simplified the business, controlled overheads and set up the DIY advertising campaign – done by a marvellous Swedish photographer – to show people that Pret food is real. "It was all about going back to the basics of producing simple and healthy food made on the spot, served by friendly staff, and communicating that with a bit of verve." The business turned round very quickly and went into steady sales growth, with a blip in the recession. In 2008, the private equity firm Bridgepoint acquired Pret A Manger, buying out McDonald's and agreeing more modest expansion plans to protect the character of the company. Now Pret owns and operates more than 250 shops in Britain, the US and Hong Kong, with annual sales of £350m.

In the UK there are 213 shops, three-quarters of which are within the M25 commuter belt, and with sales per store now twice as high as those of Costa and Starbucks. It sells more than 30m sandwiches and baguettes a year in Britain. Total sales growth worldwide in 2010 will be close to 18%. But in the capital in particular, with so many branded sandwich and coffee shops competing on every high street, isn't there a danger of saturation? Schlee thinks not: "We keep on thinking that London can't take any more, but every year we have some very strong openings. We are now doing massive business at our new Vauxhall Bridge branch and we also opened in Wimbledon this year. Airport branches at Gatwick and Stansted are also doing incredibly well and overall this year the business has had an 11% like-for-like sales increase which must be the strongest such growth in the food industry." Schlee has also been overseeing the next phase of expansion in the US. This time the approach is more restrained, careful adapting the UK model to suit American tastes.

The first Chicago Pret opened last week, serving 1,500 customers on its first day; in New York there are 26 branches with a further eight planned. Washington also has two shops which are each reporting sales of £30,000 a week. Given the challenges, Schlee is confident that they have the Pret product right for the US market this time. "They do see it as British," he says. "They see it fundamentally as fast and healthy, and they appreciate that. But it's hard for them to say and a lot pronounce it Pret A Manager!" Back in Britain, the Pret management team is working on refining and improving its range of food while upgrading facilities. Pret analyses its customer base carefully, and identifies the office worker as the most important, some popping into their local branch 10 or 15 times a week. Shoppers are also important, and they want to attract more mothers by providing more baby changing facilities. Students also make up a large proportion of customers, Schlee says. Customer feedback is crucial and the company receives up to 400 cards every week with suggestions and criticism.

Despite its insistence that its food is "healthy", the chain has been taken to task by health and consumer groups for the high calorie and saturated fat content (the latter because of its fondness for mayonnaise and fillings like hard cheese) of its sandwiches. Now the chain displays these details on the shelf, while more nutritional information is available online. Sandwiches, baguettes and bloomers account for 20%–25% of sales, with coffee 20% and crisps 6%. Despite all of Pret's 4,878 employees being eligible for a performance-related bonus, staff turnover is running at about 64%, but Schlee says the most meaningful statistic is how long the average general manager is in the shop for – currently 22 months. "That is what can kill the fast-food business – the high turnover of managers." And the managers are given control over their own profit and loss accounts, giving them a lot of responsibility at an early age and a strong performance incentive. "We have a pretty good track record of turning around team members – in three years they can be running a £1.5m business," says Schlee.

Pressure In the depths of the recession, Pret's sales slipped as people saved money by making their own lunches, but they bounced back in 2009, rising 11%. Schlee explains: "We weathered the battle of the Tupperware and it taught us that come rain or shine, Pret is a brand people trust – and people will come back." He is predicting now that Pret will achieve sales of £320m for the full year in 2010 with profits (before exceptional items) up by more than 30%. But he does not underestimate the financial pressures ahead for consumers, with government funding cuts and the rise in VAT in January. Pret will launch cheaper foods – including a £1.99 ham salad sandwich – while keeping 90% of prices the same as they are now. Schlee is sanguine about this: "I do see tough times ahead. It is difficult to forecast how customers will react to the VAT rise next year and companies must be sensitive.

Pret will continue to focus on affordability and we will absorb most of the extra VAT." Curriculum Vitae: Clive Schlee "Sleeper Hit; Sinclair Beecham and Julian Metcalfe Reinvented the Lowly Sandwich with Pret A Manger. Now, Going It Alone, Beecham Hopes to Do the Same with the Hotel; Offering Rooms by the Hour and KitKats at Cornershop Prices. He's Got the Bread, but Is He Using His Loaf Asks Geoffrey Wansell" - The Evening Standard (London, England), August 18, 2006 | Online Research Library: Questia Article excerpt Byline: GEOFFREY WANSELL For a man who says he doesn't know anything about hotels, Sinclair Beecham, the 48-year-old entrepreneur who co-founded Pret A Manger, has very firm opinions. 'I hate middle-market hotels,' he says. 'They don't do anything well.

They're not particularly clean, they're not particularly new, and everything they do seems to rip you off.' Now the Lancing-educated Beecham, who made a personal fortune in excess of [pounds sterling]10 million from the 150 Pret outlets worldwide, intends to turn the hotel world on its head - just as he did with the sandwich business. He's about to launch The Hoxton hotel in the City, and he's invested [pounds sterling]1 million of his own money in what he calls a 'luxury budget hotel', which opens on 1 September. 'I don't think people in the hotel industry are working hard enough for their customers,' he says, 'and I want to prove it by doing the same in my hotel as we did at Pret. I want to look after my customers.

I want them to care about me because I care about them.' Sitting in one of the newly completed, wood-panelled rooms at The Hoxton - complete with its wall mural, white Frette linen, duck-down duvet 'and the same mattresses they use at The Metropolitan in Park Lane' - Beecham tells me that he intends to make The Hoxton, which cost [pounds sterling]18 million to create, into 'the first upmarket, low-cost, highquality, no-fuss, value-for-money hotel' in the country, complete with 185 double and 20 twin rooms. Controversially, perhaps, he intends to rent out rooms between 10am and 5pm as a 'private office' for anyone who 'wants to work, think, meet and escape the world' at just [pounds sterling]19 a day plus VAT. 'Hotels are petrified about that idea because of the whole "hot sheets" thing,' he says. 'Of course I don't want that, and if that goes on I'll stop offering the service.

But I want people to use the space if they've got a meeting in the City at 10am and another at 4pm. They need a place to go in between and think.' For all his strong views, Beecham, slightly balding and wearing an open-neck Ralph Lauren shirt and blue jeans, is distinctly reserved. He hates publicity - so much so that one of his colleagues calls him 'London's best-kept secret'. Beecham started Pret A Manger 20 years ago with Julian Metcalfe, whom he met while they were both studying urban estate management at what was then the Polytechnic of Central London, now the University of Westminster. The son of an RAF man, he left his public school at 17, 'with two very bad A levels, in economics and English', and admits to 'not liking school and not being very academic'. He got a job working behind the counter of a branch of NatWest Bank. When he tried to move job, however, Beecham discovered that he needed a degree, and his father suggested property - which led him to the polytechnic and his future business partner.

After graduating, he worked for a property company, Crest Estates, in Woking, but didn't lose contact with Metcalfe. The two men decided to rent a shop in Fulham, but they didn't begin with sandwiches; instead they started with an off-licence, calling it Hair of the Dog. It was an instant success, but there were problems. 'Julian picked the right shop in the right area,' Beecham says, 'but when it came to running a business he was hopeless. We were taking [pounds sterling]10,000 a week but losing money. We decided there was more scope in low-priced, high-margin food like sandwiches than in high-priced, low-margin off-licences.' And they were right. Pret now has ten stores in New York and seven in Hong Kong, in addition to more than 130 in the UK. The chain employs 3,000 people and the turnover is almost [pounds sterling]150 million a year. And this is a company Beecham and Metcalfe started with just a [pounds sterling]20,000 bank loan. They opened their first Pret in Victoria in 1986.

'But I can assure you that the formula when we opened wasn't the winning formula,' he says. … Subscribe to Questia and enjoy: Full access to this article and over 10 million more from academic journals, magazines, and newspapers Over 83,000 books Access to powerful writing and research tools Article details Hotels and Motels--Prices and Rates Hotels and Motels--United Kingdom Fast Food Restaurants--Prices and Rates Related books and articles Newspapers Encyclopedia Pret a Manger founders sitting pretty - Telegraph Pret a Manger founders sitting pretty Beecham [left] and Metcalfe launch their first Pret in Victoria 22 years ago 12:01AM GMT 24 Feb 2008 The founders of Pret a Manger have sold their biggest sandwich: a £350m deal with a private equity firm and a bulge bracket Wall Street bank. Ben Harrington looks at the genesis of the chain and how the new owners want to expand 'pretability' in the US It's the sandwich chain that brought us crayfish and avocado, chrome interiors and a charity that distributes unsold food to the homeless.

It has revolutionised the lunchtime eating habits of millions of office workers with freshly made food and witty apologies for having to charge VAT. Now the founders of Pret a Manger, Julian Metcalfe and Sinclair Beecham, have sold the business for £350m, making themselves a fortune of at least £50m each and handing over ownership of the now iconic chain to private equity. Having carefully built the impression of an anti-corporate ethos over more than two decades, the pair have sold to Bridgepoint, a UK private equity fund, and Goldman Sachs, the most powerful investment bank in the world. Butties have become big business, and fancy ones at that. Pret sold 30m sandwiches last year, washed down with 20m coffees. It's branched out into sushi and sold 1.4m packs of raw fish as a result. Customers get through 12,000 cups of miso soup a week. Having conquered a British palate more used to cheese and tomato on white than falafel, spinach, tomato and spicy yoghurt on wholegrain, the company wants to expand abroad having already started in New York.

"A key market for us is Manhattan," says Clive Schlee, Pret chief executive. "Zagat, the influential US food magazine, has called us the best British invasion since the Beatles." The bankers now in control, who probably previously sent out for the chain's smoked salmon, wild crayfish & Dijon dressing salad, will need to get to grips with a chain that, rather quaintly, still has kitchens in all of its stores. The idea is that staff can create freshly made pastries, sandwiches and sushi everyday while other mass food retailers tend to centralise production to reduce costs. Will that be the fate for the Pret sandwich? Will the new shareholders demand factory production to reduce costs, and maybe reduce fillings? "Absolutely not," says Schlee. "For Pret, such an idea is like putting garlic to a vampire. Freshly made food gives us an enormous competitive advantage. During the process we got some of the Bridgepoint executives into the kitchen so that they could understand that". Metcalfe and Beecham's first store near London's Victoria station opened 22 years ago, latching on to the new consumer boom of the mid-eighties and the demand for specialist retail outlets that catered for a more sophisticated and demanding public.

Sick and tired of the grey, drab consumer experience of the 1970s, Pret a Manger caught the new consumerist spirit of Margaret Thatcher's more affluent decade. By night the new breed of yuppies had acquired a taste for Bollinger and by day they certainly wanted something more than a limp ham sandwich for their lunch. Just as Anita Roddick brought cosmetics with attitude to the high street in a retail revolution aimed at women demanding emancipation from drab department stores, Metcalfe and Beecham gave lunchtime a makeover while making sure people felt good about what they were eating. Just as Body Shop inspired a host of specialist retail outlets, such as Sock Shop and Tie Rack, Pret a Manger has spawned countless copycats specialising in everything from soup to sushi. Back in 1986, the two men had no idea that Pret would end up as a global retail brand stretching across three continents which would earn them millions. While in their twenties, they stumbled across the idea as they hunted for a decent place in central London to buy a quality sandwich during their lunch break. To legions of fellow workers, the British high street offered only a depressing collection of greasy spoons and shabby sandwich shops.

Pret, however, could have been killed off at birth. Having decided to fill what they saw as the gap in the lunchtime market by launching a delicatessen, the young entrepreneurs nearly went bust when the venture lost £80,000 in its first year. Needing to learn quickly, they quit their day jobs as surveyors to take control of the first Pret which they subsequently launched with a £25,000 bank loan, finding a property nestling next to the dilapidated Victoria train station. It took them five years to get the formula right, but today Pret is one of Britain's most popular sandwich retailers: it has nearly 175 shops in the UK, and outlets in New York and Hong Kong, which together generated earnings of about £30m from sales of £223m last year. That success has led to the Bridgepoint and Goldmans investment. But the two financial investors are not the first to try and profit from the Pret recipe.

Back in 2001, Metcalfe and Beecham sold a 33 per cent stake in their business to fast food giant McDonald's for £50m, a controversial move for a company that had styled itself as anti-big business. Having done the deal, the pair took a step back from Pret and went their separate ways. Beecham stepped down, although he remained a non-executive director, and pursued a new venture, an affordable but smart hotel based in the heart of Cool Britannia, Hoxton. Meanwhile, Metcalfe - who is divorced with four children - set off to launch a hip new sushi chain Itsu along with Schlee before he became Pret's chief executive. Metcalfe's life has never been short of the sort of drama beloved of gossip columns, no more so than when Camilla Tobias, wife of the actor Oliver Tobias, revealed that her 19-year-old daughter, Celeste Tobias, was in fact Metcalfe's daughter.

But while the founders were off pursuing new careers, the Pret management installed to look after the shop, including then chief executive Andrew Rolfe and his deputy Harvey Smyth, had set off with some grand expansion plans of their own with Japan and the US in their sights. However, with the founders' sure touch lacking, things started to turn stale and the expansion plans ran into trouble. Pret was forced to drop plans to open 80 stores in Japan, after reaching just 14, and had to tone down its original US growth plans. Rolfe and Smyth left the company in acrimonious circumstances. They were replaced by Schlee as chief executive, chairman Larry Billett, a former Salomons banker, and Metcalfe, who returned full-time as creative director to focus on developing innovative food ideas. Beecham, though, never returned to a full-time role. "Bridgepoint was persuaded to buy the business on the back of the existing management's three-year plan," says Schlee. Since Metcalfe's return Pret appears to have rediscovered its focus. And now they have the backing of Bridgepoint and Goldmans, Schlee believes it is the right time to re-ignite plans for international expansion.

There is now a plan to press ahead abroad by doubling its number of shops in New York to 14. "Manhattan is a key market for us and we are looking at opening up in Washington this year," says Schlee, who used to work for Jardine Mathieson in Hong Kong. The recent auction of Pret, which has lasted almost nine months, has been as colourful as some the company's history. Initially, Metcalfe created a huge fuss a year ago when he blurted out that the company was examining a float on the London stock market while attending a book launch - but later, investment bank NM Rothschild was instructed to carry out a private sale of the business. There then followed numerous bidding rounds with a number of different firms, including Icelandic investment house FL group, dropping in and out of the auction process. Eventually, Billett, as Pret chairman, sidelined NM Rothschild to take control of the auction process himself, with bid proposals submitted directly to him instead of the company's investment bankers. One thing the new owners will have to get used to is the company's quirky culture, including a promise by top management to speak directly with unhappy customers.

Metcalfe is on the record promising that "if you were to ring up today saying I've just bought an avocado wrap and there's too much salt and I want to speak to Julian Metcalfe, I guarantee you'll be put through to me without a quibble". One of its most noticeable successes is the advantage it's taken of the huge influx of young foreigners looking for work in the UK. Even in a sandwich shop in the UK, you can earn a lot more money than a town square cafe in central Europe. Potential recruits are assessed for the quality of their English, their "warmth" and what is referred to as their "Pretability". They then carry out a day's paid work and other staff are asked what they think of them. If their colleagues like them, they get a job offer. So, are the all important Pret staff happy with the change of ownership? On Friday, staff at Pret's Victoria store weren't giving much away, but what is clear is they are happy with the status quo and don't want the company to change.

"Julian and Clive have e-mailed me this afternoon to tell us about the deal and to say there are not going to be any major changes - and I hope there aren't," said the manager of the Victoria store. However, with private equity investors now on board, the staff may find some new ingredients introduced to try to improve Pret's successful recipe for business. Pret A Manger prepares for sandwich battleLife Style - China Daily Asia Friday, October 3, 2014, 10:05 Pret A Manger prepares for sandwich battle By Xu Junqian in Shanghai A barista at Pret A Manger London store. The British fast food chain with an emphasis on organic and healthy food is going to open a sandwich shop in Shanghai this month. (PROVIDED TO CHINA DAILY) A battle is about to commence on Oct 16 at the back lobby in K11, one of Shanghai's recent shopping mall and office developments, a battle not fought with guns and rifles but with Scottish salmon and egg mayonnaise.

It is a battle about sandwiches, the triangular slices of bread filled with delicious fillings that have been sold from street side groceries at less than one dollar to the most high-end Western-style restaurants on the Bund, replacing dumplings and rice as the major staple at lunch for millions of office workers in Shanghai and the rest of China. As the British fast food chain Pret A Manger makes a final sprint toward the opening of its first outlet on the Chinese mainland, radical changes are expected in the fast food industry in China, which has long been dominated by fries and burgers. "What we offer is real food," said Clive Schlee, the CEO of the London-headquartered company. Founded in 1986 by two college graduates, the company is hailed as "launching a high-street food revolution" by offering packaged sandwiches, freshly wrapped from the back kitchen of the shop. Just as its name means in French - "ready to eat". From its signature superclub sandwich to hot soups tailored for the Asian market, the common factor of all the food is no chemicals, no additives and everything is organic. "Pret is coming with a level above the average foreign fast food chain," said Schlee.

"We are targeting young office workers, which has been our tradition right from the beginning." With a decade of working experience in Hong Kong for multinational conglomerate Jardine Matheson, in charge of the group's fast-food brands such as Pizza Hut, Sizzler and Taco Bell, Schlee believes that Chinese young people have a much larger appetite for Western food than their parents' generation. Shanghai has no shortage of cafe-sandwich-shop chains to meet the growing demand. In 1999, just before Pret A Manger's founders Sinclair Beecham and Julian Metcalfe were awarded an MBE in the Queen's Birthday Honours List for services to the catering industry, the Denmark entrepreneur John Christensen found a spot for himself in Shanghai's food business with a Nordic-style coffee and sandwich shop called Wagas. In 2002, as the British chain started its expansion into Asia, first in Japan and a month later Hong Kong, a former chef from United States who made a living by teaching English in Shanghai, Scott Minoie, resumed his previous profession by starting a slightly more-formal-than-cafe restaurant called Element Fresh.

He was driven by a similar goal - to satisfy the need for an original, safe and delicious sandwich or meal. Both of those two ventures have become successful food companies overseeing a total of twenty-or-so outlets mainly in Shanghai and Beijing, with local Chinese making up the lion's share of their clientele. At some of Wagas' less centrally located stores, the percentage of local Chinese could be as high as 80 percent, the company said. "Back in 1999 many of our Chinese customers were simply curious or interested about Western food," said Jackie Yun, the managing partner of Wagas. The Australian-born-Chinese joined Christensen soon after he founded the cafe. "They did not necessarily enjoy eating sandwiches or salads. In fact they would find it strange that we did not cook our lettuce, while now the eating habits and palates of Chinese people are much more sophisticated," she said. Wagas, now a multi-concept restaurant group with six brands, including a bakery, doesn't provide its business revenue or growth rate.

Scott Minoie, the founder and CEO of Element Fresh, said in an earlier media interview that in 2011, his company has raked in 200 million yuan, 40 percent up from the year before. "Competition is fierce compared to a decade ago and the market in first-tier cities is mature," said Yun from Wagas. "In this day and age it is too easy to get complacent. There isn't much room for complacency in such a competitive market. You see cafes/restaurants come and go on a daily basis," she said, believing Wagas entered the market at just the right time. But Schlee doesn't think it would be too late to have the first Pret A Manger in China now. "In the food business, the time of entry is not so important. If you are a great operator, people will come to you," he said. "You have to be a strong business to go into China. You have to build a strong business in the rest of the world first to support going to China, because a Chinese project is a big project," he added. Pret A Manger has 350 shops worldwide.

While most are in the UK, the company has gained a foothold in the United States, Hong Kong and France. And Schlee believes the global presence of Pret has already made the brand "powerful in China, among both locals and expats". His confidence seems grounded. At two of the most popular search engines in China, Baidu.com and Bing.com, the top related words popping out, after typing in key words Pret A Manger, include "Shanghai" and "K11", the location of its first outlet in China. On dianping.com, China's most widely used dining guide and rating website with 3.5 billion visitors every month, a spontaneous page about the sandwich shop has been set up and filled with all positive comments since July, three months before the official opening. The comments, all in Chinese, have mostly mentioned the pleasant experience at the Pret A Manger stores in other countries and are loaded with anticipation. Although Schlee sees the competition in the market more as "a competition with Pret itself", one of the major challenges for foreign companies to operate in China is the management of the unstable, if not unsafe, food supply chain.

In July, US fast food chain McDonald's and KFC were caught supplying out-of-date meat from an American-owned food processing plant in China. And this is not the first time the two restaurant giants were hit by food safety issues in China. "The scandal may mean people are most sensitive to food safety and they will probably have more trust in Pret. And Pret would make sure the trust is not wasted," he said, referring also to the tough time in SARS-hit Hong Kong in 2003, when Pret was "doing very well" with trust and integrity. While the slogan from the draft menu provided to China Daily states "the best ingredients from around the world", the management team from the food department of the company confirmed that 70 percent of the food made and sold in Shanghai will be locally sourced instead of imported. And Schlee thinks that Pret A Manger's brand name is strong enough to "give protection" to the food his team has been spending the past two years researching. "I am confident Pret will be good in Shanghai. We are doing the business not for now, but for 2025. It's a long-term plan," he said.

Although he wouldn't be drawn on the number of outlets planned to open in Shanghai by 2025, he admitted that Pret A Manger is looking around at more locations in Shanghai.

Question: What was the up-market fast-food chain started in 1986 by Sinclair Beecham and Julian Metcalfe?
Answer: PRET A MANGER